An Analytical Comparison of Single-Stage and Two-Stage Models of Consumer Behavior

This paper addresses an interdisciplinary issue: the use of economic models of consumer behavior in the field of marketing. The main purpose of this research is to examine the implications of modelling consumer behavior utilizing two-stage utility models as against conventional single-stage utility models. The condition under which both types of models yeild the same observable behavioral pattern is studied. Based on this condition, it is then argued that two-stage models provide a better framework for explaining empirical findings in marketing.